Solve Tax Problems

Bloomberg Stands By “Cowboy” Remark in State Cigarette Tax Dispute with Seneca Tribe

New York’s cigarette tax of $4.35 (raised this year from the already-high $2.75) is sufficiently high relative to its neighbors to induce schemes to bring in cigarettes from out-of-state. Determined to overcome this resistance, the state is thinking up new efforts to clamp down on smuggling and illegal sales.

One is by going after the Seneca tribe of Native Americans. Cigarettes are sold on tribal lands, and the state tax does not apply as it is sovereign land. New York is unhappy with this arrangement – in 2005, the tribe sold as many cigarettes as the rest of New York altogether – and they claim that New Yorkers are illegally smuggling cigarettes from the reservation to the state. So they passed a law, to go into effect today, requiring the Seneca to collect New York cigarette tax on sales to non-tribal members, if the cigarettes are bought wholesale from outside the reservation.

The Seneca, who rely heavily on the sale revenues themselves, went to court and got a federal judge to suspend implementation of the new tax requirement. The Oneida and Onondaga, two other nearby tribes, will stop buying wholesale and switch to brands produced on the reservation. New York was hoping for $150 million from the scheme, but that probably won’t happen.

New York City Mayor Michael Bloomberg tastelessly implied the use of more brutal force against the Seneca for refusing to collect New York taxes on their reservation:

Bloomberg said on a radio show that Paterson needs to grab a “cowboy hat and a shotgun” and demand the money himself.

The Seneca Nation reacted harshly, demanding that the mayor either apologize or resign, calling on Paterson to distance himself from Bloomberg and threatening to pursue a hate crimes case against him.

Bloomberg’s office said no apology or resignation would be forthcoming and that the tribes should just “follow the law.”

This is a classic case of states reaching across jurisdictional lines to use force to prop up a broken tax system. New York’s high cigarette tax is causing these problems, and to ameliorate them, the state should bring it in line with competitors.

Tags: cigarettes, new york tax, tax

IRS: Abusive and Intimidating Methods

The Internal Revenue Service is adept at using leverage to intimidate, coerce and bluff taxpayers and their representatives into adverse collection and examination determinations based upon weak legal authority and incomplete or insufficient facts. The IRS will “roll-over” taxpayers and weal representatives who are not familiar with taxpayer rights and lack of knowledge about the nuances of the tax law. The IRS enforced collection actions are extreme, and they mostly abuse the intent of the Congress not to refrain from collection actions that create an economic hardship within the meaning of §6343 of the Internal Revenue Code.

The IRS agent is both “prosecutor” and “jury.” The IRS agent raises issues and comes to conclusions that are presumed to be correct under present law. Also, taxpayers, not the IRS agent, must prove the accuracy of their deductions.

This leverage against a taxpayer applies even if the agent uses incorrect or incomplete facts or makes determinations on erroneous or flawed argument and law. It is not unusual for the IRS to tax extreme positions on the factual and legal issues. The agent can be sloppy and incompetent and still get a large and unjustified tax deficiency. The raw power of the agent’s position and presumption of correctness is intimidating to taxpayers and intimidating to the representatives of the taxpayer who do not have the skill or ability to identify and advocate the factual and legal issues for their clients. The “intimidation” of the IRS agent is used as a tool to close cases quickly.

Tags: abuse, intimidate, irs bully, problem, tax attorney, tax help

Payroll Tax Relief

It’s fairly common for businesses – no matter what size – to struggle with some sort of payroll tax issue or another. Even companies that use good payroll software to sort out their entire payroll related taxes are still prone to errors. The IRS implements strict guidelines when it comes to filing and paying payroll taxes in a timely manner. Are you a business owner with payroll tax problems? It’s going to be difficult to obtain tax relief if you have been found guilty of deliberately failing to meet your obligations.

Late filing and payment

Late payment of payroll taxes causes your business to incur penalties and additional fees, which can be a huge problem especially if your business is already contending with cash flow issues to begin with. Small businesses, for instance, rarely have ample capital to run their operations, so when unexpected fees like these come up, cash flow is compromised.

The issue gets worse if you fail to file your payroll returns on time, as you’re incurring penalties for that error as well. Each monthly delay on filing can cost you 5% of your whole tax debt – and that doesn’t include other penalties resulting from late payments. Tax help usually comes in to negotiate these fees but unless you get it from a reliable and licensed professional, you wouldn’t be able to get anywhere as far as tax relief is concerned.

Trust fund recovery penalty

As an employer, it is your responsibility to deduct federal tax dues from your employees’ paychecks and pay it to the IRS on time. Failure to do so will result in a 100% penalty and enforced collection on the responsible person, the owner of the business or an officer of the corporation. The IRS can also put a levy on company assets, including bank accounts and receivables until you pay for the payroll tax debt.

Handling payroll tax errors

The best ways to avoid payroll tax problems is to timely file and pay your taxes. Make sure that your payroll is current. You may want to source this work to a professional so you make sure that all the payroll taxes and withholdings are properly accounted for.

It’s natural to make mistakes. To avoid messy payroll tax problems, you want to review your records every year and be on the lookout for these errors. Doing so will help you handle discrepancies as they come instead of tackling all of them two to three years later, when errors have gotten out of hand.

Know your rights!

In order to get the best tax relief possible, it is important for you to know what your rights are. The IRS will then assess you penalties according to your willfulness – that is, your awareness that a lapse in payment has taken place. It pays to have a tax professional with you so you can assess whether or not you’re eligible for certain tax relief help options such as installment payments, offer in compromise, and other alternatives.

Tags: 940, 941, payroll tax, tax relief

IRS Appeals

In the event that the outcome of your case is less than what you believe is fair and equitable, you have the right to appeal the IRS’s decision. The IRS has a special department devoted to appeals called The IRS Appeals Division. The objective of the IRS Appeals Division is to resolve disputes between taxpayers and the IRS.

Learn how IRS Appeals can help you avoid problems. Visit www.USTaxShield.com